One of the most common sports betting mistakes that casual fans make is to confuse special knowledge in sports with a specialty in sports betting. This error is illustrated by the proliferation of ex-professional sports stars that become betting tipsters or self-proclaimed experts. How many examples are their of former professional athletes that lost a large amount of money betting on sports? Here is a look at the “Green Lumber Fallacy” in regards to the difference between sports and sports betting.
The Green Lumber Fallacy
One of the most successful traders to ever buy and sell freshly cut wood, which is referred to as green lumber, actually had no idea what he was trading. He spent his entire green lumber career believing the product was just wood painted green and not newly cut trees. The term “Green Lumber Falacy” was coined by Nassim Nicholas Taleb in his book “Antifragile”. The term is meant to outline a similar situation where a star Swiss Franc trader who can’t locate Switzerland on the map is able to thrive making money when trading the country’s currency. The reality is that the trader didn’t have to be the geography major in order to thrive in the trading business. This theory can also be applied to sports betting in that somebody doesn’t have to be an expert in a given sport in order to make a substantial amount of money betting on it.
The Differences In Sports Betting
While the wood seller wasn’t an expert in wood and the Swiss trader wasn’t an expert in geography, they both understood risk and how to capitalize on their given situations. This can be true with sports bettors as well. Just because somebody has detailed knowledge or experience in a sport doesn’t mean they have the required knowledge to bet successfully on that sport. The media can love a narrative and really drive it home but that doesn’t mean the story will not move in a completely unexpected direction. The reality is that while the sports media features countless former players that can give some excellent insight in to the actual games, that doesn’t mean they know how to pick winners and losers. At the same time, somebody that has never played a sport can be even more likely to make a profit by betting on it.
The Green Lumber Fallacy and the Swiss trader stories can teach us an important lesson when it comes to betting on sports. Knowledge is important and when it comes to betting, there are things like reading lines, money management and taking calculated risks that are much more important than actual knowledge of the sport. There is certainly statistics and information out there that can help push us in the right direction when it comes to making informed decisions but sports bettors should never take that information as a guaranteed way of leading to the right picks. The Green Lumber Fallacy can shed some important insight on the difference between sports and sports betting and it’s important for casual players to remember that lesson when wagering on sports in all situations.